Learning from the Terra Meltdown

Learning from the Terra Meltdown

The last 6 weeks have certainly been a painful experience for cryptocurrency enthusiasts and investors, with Bitcoin crashing a full 35% since May 15th (and, at the time of writing, a staggering 71% from its all-time high from mid-November 2021). Given Bitcoin’s...
Understanding the SABR Model for Option Pricing

Understanding the SABR Model for Option Pricing

When pricing options, one must always be careful to model the implied volatility of the instrument appropriately. This is not actually particularly easy, because implied volatility is, by definition, not observable in the market. It is essentially a value that, when...
The difference between risk and uncertainty

The difference between risk and uncertainty

Given the turbulence seen in financial markets and elsewhere these days, people are rightly confused and worried about the future. Forward planning under current circumstances is incredibly difficult. I have spoken to good friends who are used to planning months or...